The city hopes to quiet one roaring gripe in San Francisco: Cranes are in the air and housing is pouring into neighborhoods, so why haven't public transit improvements kept up?

Well, those complaints may never dissipate. But the first citywide transit fee on market-rate residential development was introduced as legislation Tuesday to help the San Francisco Municipal Transportation Agency pay for $1.2 billion worth of upgrades over the next three decades.

The transportation sustainability fee on housing will add about $14 million a year on average to the $24 million already collected annually from development such as offices, retail and manufacturing, the city estimates.

“When I tell people that commercial development is required to pay transit impact development fees but residential doesn’t pay a dime, their jaws typically drop,” Supervisor Scott Wiener, who sponsored the bill, told the Business Times. “It’s been a gaping hole.”

Expanding Muni

Fees will mostly help pay for maintenance on expanding the Muni fleet, upgrading aging buses and rail cars, building Geary bus rapid transit and improving bike lanes. Just 5 percent of new revenue will go to regional agencies like Caltrain and BART, which is nursing its own funding wounds.

Muni has tried to catch up with the city’s population boom after sagging city budgets and the recession put a dent in “Muni Forward” plans until this year. Rides are cheaper than most other cities, but Muni cars suffer from slower average speed and higher operating costs, according to a report last year.

To help stop some of the bleeding, residential builders will pay $7.74 a square foot on new projects, with those already approved by the Planning Commission grandfathered in. Non-residential projects will pay $18.04 a square foot, and production, distribution and repair (PDR) buildings will pay $7.61.

Private, nonprofit universities that build new facilities will also have to pay fees for the first time, but other nonprofits would be exempt. Wiener’s efforts to get more nonprofits to pay for transit upgrades went down in flames at the Board of Supervisors in 2012, eliciting major backlash even from the San Francisco Chamber of Commerce.

Large residential projects already pay the city money for affordable housing and infrastructure, which are legislated into area plans like Market-Octavia and Eastern Neighborhoods. Developers will also have to pay for new piping systems to use recycled water because of another Wiener bill earlier this year.

Housing boom

But the growing gap between surging residential construction and transit improvements has stung even those trying to get housing built. Neighborhood groups usually friendly to development, like in Dogpatch, have started to feel overrun. In a fact sheet sent to reporters explaining the new transit fee, the city used language usually reserved for the Board of Supervisors' progressive wing, calling out "luxury high-rise condominiums."

"These are the types of projects that can put a tremendous strain on the transportation system, yet so far they haven’t been required to account for that. That isn’t fair," the city notes.

Planning Director John Rahaim told a crowd at the public policy think tank SPUR earlier this year that only affordable housing outweighs that transit gap as the top issue that “keeps him up at night.”

“What really is of concern to us is that infrastructure isn’t keeping pace with growth, particularly on the transportation side,” he said, adding that the city has a million transit rides each day on BART and Muni. Meanwhile, the city's population is growing at its fastest rate since World War II.

“Those numbers have grown exponentially," Rahaim said at the time. "We really have to get a handle on it.”

Early support

Wiener, rarely a foe of developers, appears to have gotten some real estate heavy-hitters on board with the new transit fees, even as the cost of construction rises and expectations for affordable housing grow.

The pro-development Housing Action Coalition supports the fees, its website says. The group wanted the city to consider funneling housing projects’ transit fees into improvements in the same neighborhoods.

That didn’t happen, said Viktoriya Wise, chief of staff of the sustainable streets division at SFMTA. “San Francisco is seven by seven (miles), so we have to look at transit holistically. Just because improvements aren’t within 10-block neighborhood radius doesn’t mean it impacts how fast you get home,” she said.

The transportation sustainability fee will be heard by the Planning Commission and the Board of Supervisors before it goes into effect.

Correction/Clarification

The Business Times incorrectly reported that state universities like UCSF would be subject to the development impact fees, but they will only apply to private universities.